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NEW DELHI: Hindustan Unilever Ltd slipped over 6 per cent in early trade on Wednesday after going down nearly 3 per cent on Tuesday, as falling volume growth and a proposal to increase royalty payments disappointed investors.

At 09:20 am, the stock was trading 5.6 per cent lower at Rs 454.90. It has hit a low of Rs 447.25 and a high of Rs 459 in trade today.

Reacting to the results, CLSA downgraded the stock to 'sell' as third quarter operating performance disappointed and revised their target prices to Rs 430 per share.

Other brokerage firms like Credit Suisse and Nomura, cut their ratings on Hindustan Unilever, a day after India's largest consumer goods maker disappointed investors with slower-than-expected volume growth and a hike in royalty payments.

HUL posted a 14.6% growth in profit but said it could have to combat challenges arising from inflation and currency volatility. The company's domestic sales rose by 15% to Rs 6,158 crore from Rs 5,360 crore in the year-ago period.

At present, the Indian arm of Unilever Plc pays a royalty of over 1.4 per cent of net sales which will increase to 3.15% by 2018 in a phased manner, according to a statement issued by the company.

Defending the increased royalty payments, HUL said that as competition intensifies, particularly from global players, Unilever is committed to supporting it in terms of new products, innovations, technologies and services for HUL.

"We re-align our models and cut our EPS estimates by 3-7% over FY14-15 as we build in a 50 bps annual royalty increase in FY14-15 and tweak our cost estimates," CLSA said in a note.